pre-existing conditions according to a new report from the commonwealth fund. since the number of people enrolled on the plants will grow quickly from 122,000 at the end of 2017 to 1.6 million by 2022 as people return as a an affordable option. the british prime minister, the major stick appliance, how to guarantee the -- sticking points, how to guarantee the border between ireland and northern ireland. officials say they are working on a new plan. may's trip comes amid tensions between britain and the eu over terms of they brexit deal. marinee of a former u.s. boarded a plane more landau to

mexico.plane from she self deported leaving behind her daughters. her lawyer says she checked in with immigration officials regularly until the trip administration enacted its zero-tolerance policy. darren soto took up her cause. he introduced a bill to help protect military spouses in the u.s. without legal permission. >> her husband served in the , and north i asked africa while she was at home on the own front -- on the home front raising to lovely young women. what justice does this serve? global news 24 hours a day on

their and on tictoc on twitter powered by 2700 journalists and analysts in 120 countries. i'm mark crumpton. this is bloomberg. lisa: life, i'm lisa abramowicz. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. lisa: 30 minutes from the close of trading. major averages in the green. the fifth weekly gain. joe: what'd you miss? scarlet: u.s. labor market chugs along. giving the fed the study pays it needs to stick to its rate hike path. throws term -- turn to back. white house advisor larry kudlow

says president will not back off. consumers are about to feel the pinch. why there may be warnings of companies raising races across every industry. the u.s. job engine humming along. workers added at a cooler is that they'll belong -- below the consensus forecast. guest calls it solid momentum to start off. we welcome now lewis alexander, the u.s. chief economist. on the whole it was positive. >> this was a solid report. the backward revisions made up for the fact the front month was week. saw probablye overstates the momentum in the economy. joe: what did it tell you about

how close we are to full employment? of course massive debate about whether the unemployment rate is understating the slack we have. trend did see a positive in female participation. that has kept the labor force stronger than the pure demographic. there is a limit to how far that can go. the fact that it is well below convention now estimate in of stability in the long run tells you we are operating beyond full employment and there is a limit to how far that can go on before inflation starts to press up. on full employment. why hasn't it already shown up, how can we keep creating 200,000 , if we are beyond this level?

>> prices have been going up. you have seen a modest acceleration. if you look at average hourly earnings the monthly increase wasn't that great but on a year-over-year basis it has been trending higher. that is true for the employment cost index, the core measures on inflation. and will see how you look at the broad numbers and not argue we moving to a zone where inflation is picking up. scarlet: they did pick up on a year-over-year basis. they still remain range bound. relationship between average hourly earnings and labor practice a patient? meaningfully move higher? >> look. i would argue on a trend basis wages are growing, going up gradually. you don't see it when you round

the numbers but when you look at it overtime wages are going up. the big difference is that activity growth is lower which means you are going to get less wage growth than in the past. if you compare it to the late 90's. the labor markets were tight. productivity growth was a point and a half higher than now. i don't think it is that hard to explain. it is -- we would all like to see faster wage growth but it is not right to say that wages aren't accelerating. lisa: i want to go a little game theory here. we were talking to a guest saying the good jobs report gives the trump administration more ammunition to continue escalating the trade skirmish that it has entered into with china. do you agree? does this create more of a headwind to growth?

>> i do think the administration is likely to be more aggressive as long as the economy is strong. if it starts to weaken they will be more conservative. i would agree in the short term that is an issue. it is hard to know what the administration ultimate objectives are. i was surprised they backed off in the deal with juncker. we will see. the response from china today was measured. in terms of the aggregate tariff revenue, it is below the proposed 25% on 200 billion trump laid on the table. they may be trying to deescalate this. we will have to see how they respond but it does feel we are heading for things getting worse before they get that her. >> it doesn't show any evidence of trade war collateral damage from their rhetoric. when it does show up how will it show up in the jobs report?

>> i do think the first negative effects will come through investment. that is linked to the manufacturing side of the employment report. andfact that manufacturing construction were as strong is evidence that we are not really seeing it just yet. barriersote the trade we are talking about so far, where trade partners have put on tariffs on u.s. products, that isn't showing through either. you could see it in agriculture, goods which would happen in the next round. none of that is showing up just yet. manufacturing investment is the first place i look. joe: i want to talk about regards to inflation, prices are going up. wages aren't.

neither is going up at a rapid pays. nothing that anyone would call spiraling. from the fed perspective, thinking about risk and reward is this acceptable? does it make sense to say prices are going up but given the opportunity to say, bring more people in the labor market who left, the opportunity to let the market run hot so companies have to invest in training and new equipment, is it a positive trade for them for they could say prices are going up but not any way that is dangerous? >> frankly i think that is a good description. this is why they are only raising rates gradually. they are only raising rates at half the pace they did in the last cycle. i think they see this their he much that way. you heard him talking about the

benefits of having strong labor markets. that is part of the discussion but they don't want to send the signal that unemployment can just fall forever. by gradual process of raising rates, consistent with striking the right balance. youlet: all right, thank for joining us. have a good weekend. action back and demand. shares of joe -- gopro jumping. it is our stock of the hour, next. this is bloomberg.

>> a look at the biggest business stories in the news now. shares rose the most

in a year and a half. there is a new report kraft heinz has begun preliminary talks with campbell soup. bloomberg has learned, a list of bidders in the instance that it is selling. shares of shake shack dropped the most in two years. 's existing --in expansion has hurt foot traffic. 30 stores inrease the u.s.. in compensation will be across the board, with the exception of m&a bankers. the biggest increase will be in equity sales. they can buy you a burger at shake shack. that is your bloomberg business flash. scarlet: a lot of time left in the year.

it is time for our stock of the hour. gopro. shares are soaring in on pace for the best one-day gain since 2014. abigail doolittle joins us with the details. expectations for gopro are all over the map. it is like a cap that has -- cap it has nine lives. in this case they put up a smaller loss than expected. the bigger pieces they are atecting, investors looking this. aggressive cost-cutting. the sales little better than expected. >> i thought gopro was gone. do you know people who have been buying gopro's? >> that is an interesting point. that was my question.

what is the long-term market for gopro? that is a big piece of it. goproople who want cameras probably already have it. how do they drive new sales? if we talk and desktop into the bloomberg, they have been putting up these big losses. one sincethe first 2017 whether trying to clean themselves up to sell themselves to google or nike, something along those lines. joe: the revenues are stabilizing. >> they actually grew. they went after that amazon prime day aggressively. the products were sold were a higher price point for them. whether or not there is any long-term viability, hard to say. they could diversify. maybe they find something else. scarlet: joe and i always go

back to the things, of trying to be part of an energy company. it is a hardware company. next, larry kudlow has a message for china, don't underestimate president trump. proceedes the trade war from here? this is bloomberg.

>> china stepping in. read imposing requirements that make it more expensive to bet the yuan will weaken against the dollar as the chinese currency slides to a key level for more, we welcome cameron, thank you for being here. how important was it? what does it say about the mood and tone they took this move today? >> let's take a look at the

backdrop. after president trump announced we sawalation, speculators step in to sell aggressively. the people's bank said have at it. didn't really lift much of a finger to take the other side which means they were very happy to see that. it is because of the weakness in china's currency. when you look at it through

that, it makes sense that they are tamping down. that thissigns weakness of the currency represents a domestic issue or capital flight. it looks like this was a speculative driven move with the tacit agreement of the people's bank. now they are saying let's take the wind out of the sails and not coincidentally, after they did that, they called that moving the pond to the side, they move the root into an attacking position and announcing they would reciprocate. they did give with one hand but take away with another. scarlet: that is great perspective. the move that china did make here, it imposed a 20% reserve requirement. why did it go this route? there are other ways of

supporting the currency. >> this is the least painful one. if you buy it you are draining currency from the system and that raises interest rates and domestic money market. you can keep interest rates wherever you want. the irony is in 2015, the last time it weekend, the people's bank was stepping in. domestic interest rates went higher. this time is the opposite. they cut the overall reserve requirement. is if we goresting back to that chart for the previous time they did this, it didn't reverse the trend. all it did was take us going sideways for a few months. the trend reasserted itself. i suspect they will see something similar.

all they are doing is tapping on the brakes. let's get trump off our backs and maybe in a few months we can go back to the way we were headed. >> if we are thinking about the chinese roster going into another possible round of tariffs, what is the combination twooday's to moves -- moves? there is, they twot want 25% tariffs on hundred billion dollars worth of goods. by the same token they don't want to sit back and take it as trump blusters. approach more direct ,n terms of apples to apples tariff to tear of confrontation. ,he other thing that came out

the isn report. you're starting to see more commentary domestically that companies are being impacted by tariffs. china --be hitting hitting u.s. companies harder than the currency move. scarlet: good stuff. thank you so much. we were just talking about, beijing counter the tariff escalation by announcing $60 billion if its own if the u.s. pulls the trigger. larry kudlow told bloomberg a have no intention of easing up on the pressure. what's we said many times no tariffs, no subsidies. we want to see trade reforms. china is not delivering. people are leaving the country. >> we're joined by sarah mcgregor.

sarah, for the second time in as many months china has responded to the threat of tariffs with its own list of u.s. goods. we have any sense of what is on the list? are they focusing on red states? listina came up with the today of $60 billion worth of tariffs. the list is long and ranges from 5% to 25% tariffs. certain types of aircraft, machinery, agricultural products. it came out late. there hasn't been a lot of time to analyze but to keep in mind the gravity of the situation, if china goes ahead with this, that would add to the 15 that is in the pipeline. $110 billion. that is almost all of the import

from the u.s. into china as of last year. is a large amount of the total imports into china. that is a dramatic escalation. sent a clear signal that the u.s. says it might not surrender to china unless it gives, changes its economy, china is saying neither are we. any what is the latest on insipid talks between the u.s. and china? >> you ran this clip of larry china andash talking its economy saying the yuan has been weakening because china is a lousy investment destination, it's economy is weak and it is an eight poor position. he had a lot of harsh words. he had this glimmer of hope.

comments whiles there have not been talks at a in recent weeks, there was some indication china might want to restart talks at a high level. we are not sure if that is president to president or at eight senior economic level yet. deadlines?e any billion is going to be any day now. comment.illion, the ends. that will be the real leverage point the u.s. is going to hold out. right on thiso be story. wexler macgregor working all weekend if that comes. the u.s. economic policy coverage in washington. we have u.s. market getting

ready to close. indexes have been rallying. you can see gains of 1/10 of 1%. the nasdaq up from earlier on. this is bloomberg. this is bloomberg.

♪ julia: a major the last the

major averages closing higher, the s&p with its fifth weekly gain, the longest streak since december. >> i am lisa abramowicz. scarlet: i am scarlet fu. joe: if you are tuning in live on twitter we want to welcome you to the closing bell coverage. we begin with the market -- cory: we begin with the market minutes. afternoonike as the wore on, there was more momentum to the upside. keep in mind trading lower than average. it is friday in the summer, and when you look at the different interest rate groups, -- industry groups, consumer staples, utilities the leading performers. there is defensive town. -- tone. in terms of individual stocks, it is earnings season, so we are keeping an eye on various names.

let's start off with kraft heinz, soaring on speculation that could be circling campbell soup as they find their own growth illusive. craft hitting a big boost. semantic tumbling on job cuts and lackluster earnings forecast. this is a maker of cybersecurity software, falling as much as 17%. the forecast was disappointing on the bottom line and the top line. aig, which reported yesterday on profits, declining because private equity and performance did not do so well for aig. wells are not working out for aig in the second quarter. lisa: the stock closing down 2.7% and dish network's, stock of the hour, big boost their following --

it was better than expected. alix: let's take a look at the -- joe: take a look at the bond marketjoe:. year, and on the 10 we have the risk on move and nonetheless return to some buying, 10 year yield down to 2.95. it wasn't bad but it did not stream. two-year yield down to 2.65. the loser in government bond play, italy, the rates ticking higher, everything else, ongoing concerns about their budget. keep an eye on italy because investors remain very jittery. they actually intervened because they were a selloff, so interesting. on the currency front, fascinating move, talking about the chinese yuan. you see the strengthening versus the dollar, the dollar weakening after china said we are going to

restrict how much people can speculate on the currency to short it. this comes after they really want to highlight this, the chinese renminbi, onshore and offshore, have been the worst performers over the past month among other asian currencies. this is versus u.s. dollar. you can see nearly 3% decline for both, so highlighting why china wants to step in and take action. the dollar having a strange week at the end with trade tensions heating up again. joe: on the commodities market list, look at oil and gold. below $69 ahe week barrel, not doing well. gold basically doing nothing. iron ore getting a nice boost today, so maybe trade and china confidence near 5%.

those are today's market minutes. scarlet: let's get more insight into how the markets digested the data from the jobs report and tech earnings bombshells and the fomc decision to keep rates steady. this is the prudential chief market strategist with $1.3 trillion in asset management. good to see you. given all the news flow we have had whether fomc, jobs report or earnings, did any of those things change trajectory for how you see markets progressing? >> no. what is interesting is the market has been resurrected. resurrected it seems by apple, never mind you take apple out of it, they are vulnerable to chinese terrorists. nonetheless you can see this as a referendum on what investors

andeve in who will win them how this will come to closure. in terms of the big tech names, what is interesting is it was as if obituaries had been written and suddenly they come back to life. tug-of-war, do we go to growth, stay with growth, move transition to value? we are getting into the summer indulgence. markets do, and performance lessons during august. and you tend to see a transition gross momentum names to the defensive names, like health care doing well. i think we will see this going into the midterm elections. scarlet: encapsulated by today. joe: two of the big faang stocks, facebook and netflix, got hammered and have not bounced back much at all yet. if you think this is a temporary

performance, is this an opportunity to pile back into the highfliers? quincy: not yet. let's face it, we have been conditioned to buy on the debt -- dip. member august 2016? the market figured out we would see no rate hike in september and the buying came in. now it looks like the fed wants to raise rates in september and december. you have got to have deeper before buyers come in. lisa: i want to challenge you on one thing. you said apple resurrected the frank segment -- of the faang stocks segment. gainook did end up with a of more than 1.5% after a rocky week, but how much can apple be a referendum for the rest of the sector when there are idiosyncratic issues from advertising and regulatory scrutiny to the media landscape?

quincy: that is coming. this is a traders' market. you will go to where you will get advances. short covering after apple's earnings came out and that helped to boost some of the interest in the sox. someonee is a question asked me, and i did not have an answer. why don't we see a bigger u.s. impact from the trade war rhetoric and the fact nothing seems to show they are getting closer to resolving and everything suggests more tariffs are possible? quincy: i don't like to use this .ecause it sounds very nasty but there is an old adage when matters -- it doesn't until it matters. joe: that wasn't it bad -- that bad. quincy: i can make it worse. the point is right now you are not seeing the economic data.

even with the guidance, if they have mentioned this, they have eluded to it. you see an impact that actually hurts the economy, until then, will americans by consumer vehicles fewer? what if they become more expensive because of tariffs, then we start layoffs at the auto manufacturing? that is when the markets say it is starting to have an impact. lisa: how closely are you watching developers in washington for a sense of how badly things could go with trade rhetoric? put your hat on from when you worked in diplomacy back in the day. you served in washington and embassies abroad including london. how carefully can we glean clues from the discussion that may or may not happen? immune the market is because it changes. even today you have discussions.

then it was, nothing is happening. there is a telephone call. there is not. if the market were, and this is the beauty, the market sees through it. if the market had to pay attention to every comment, it would never move because there is always an issue to keep the market back. lisa: we were speaking with david wu last week of bank of america and he said he spoke with west coast asset managers who were uniformly pessimistic. he felt like there was i don't want to say political feeling where they did not agree with things the trump administration was doing, so they had a negative feeling towards the market. do you feel like investors are pessimistic right now and overplaying the rhetoric? quincy: it may be overthinking it but more cash is being raised

in portfolios. 'ake a look at the managers level of cash. it is the highest we have seen for some time. scarlet: isn't that because cash is generating return it had not been asked years ago? -- been six months ago? quincy: they are waiting for that market to pull back in a more meaningful way and enter. joe: if everyone is waiting for the pullback -- we are not going to get it? quincy: the fact of the matter is something will come because of midterm elections. the market is waiting. markets can deal with bad news. they will redirect the allocations. statistically are we going to say the pullback we had earlier this year was the only one? hardly. you could get a deeper pullback and we go into a time after the election which is in terms of seasonality the best time for

the market, historically. the latter part of november into december, that is the santa claus rally. that is the one everyone is positioned for. lisa: that will be waiting. thank you very much, quincy crosby, chief market strategist. jobs, we will look at these spots in green for the jobs report. this is bloomberg. ♪ s is bloomberg. ♪

was: i am mark crumpton first word news. national economic council director larry kudlow said president trump will keep up the pressure on china for trade concessions as china continues to duterte escalation by announcing further retaliatory actions on u.s. goods.

he spoke earlier with bloomberg television. tariffsid many times no , no tariff barriers, no subsidies. we want trade reforms. china is not delivering. their economy is weak, currency week, people leaving the country. mark: beijing plans to levy $60es from 5% to 25% on billion of u.s. imports. for the first time in 25 years the international republican institute will have a new leader. is battling mccain brain cancer, stepping down from his role as chairman. alaska senator will take over until the washington post -- and told the washington post john mccain is irreplaceable so it is humbling to lead the board and continue the great work. a man who was one of 100 people to survive the jet crash in mexico is suing the airline. mr. martinez of chicago said

aeromexico was negligent in improperly taking off tuesday during a severe storm. the jet had left durango in northern mexico when it crashed into a field near the runway. everyone on board is caved. investigators have not determined a cause. invey weinstein's lawyers new york court wanting to throw out sexual assault charges against him. the lawyers filed notice today to dismiss the case. among other arguments they say the grand jury that indicted him should have been told about emails from one of his three accusers, a woman who said he raped her in 2013. he has pleaded not guilty to the charge and sex charges involving other women in manhattan. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton.

this is bloomberg. scarlet: we got jobs data today which can only mean one day, fantastic [indiscernible] reporting --omy reporter, let's start with this mystery wrapped in an enigma, wrapped in a paradox. a mysterious increase in the prime working age labor supply. matt: we have been talking about this, but the big story over the last several years has been low unemployment, wage growth has not been increasing and we have been getting big job creation numbers month after month. everyone thought when unemployment got this low we would seek smaller job creation numbers because we have used up the pool of available labor. something interesting is all of these people who were outside the labor force and claimed they didn't want jobs are coming back in. yellow line shows.

that is the percentage of people of prime working age between 25 and 54 outside the labor market and say they don't want a job. you see that line coming down, that is where the outrage is coming from. the blue line is women. it has been responsible for this variation. you can think of a lot of women who claim they don't want a job because they are staying home taking care of family. that is starting to reverse in what seems like a cyclical manner. it is hard to estimate how much longer we can keep pumping out these big gains every month even though we have relative unemployment. people are coming back into the labor force and this accounts for 40% of increase in employment. is a big story that will continue to be a big story going forward. scarlet: as you break up the labor to the graphics more, black men to white men, what do you find their?

joe has brought this up, how do we keep adding jobs at the rate of 200,000 every month when we are pretty much close to full employment? chart showedt women driving the return to the labor market. men have not really seen that progress, and especially african-american men. you look at different in the participation, between white men and african-american in 25 to 45 age group, this chart shows the ratio of black labor participation versus white. cyclicalcts from the limits you would expect in a business cycle. you can see they have plummeted in the 1990's. this is something we talked about before the war on drugs, removing these people from the labor force. now it has come back. black labor force participation as a share of white is at the highest level from the previous two expansions but there is a from theom to improve

early 1990's albums. the idea we are out of slack, there is clear portions of the labor market like this one. african-american men, you still see a lot of potential labor supply that could be brought back to work. joe: the comments for those first two charts, all these people say full employment. there was a lot of emphasis contrary to that. matt: absolutely. joe: the other areas they talk about it being tight is truck drivers. you have a chart titled what driver shortage? i guess you are skeptical. matt: we have been hearing about this. it is a big macro story. -- capacity have gotten so tight. one reason is there more of a shortage instead of driver shortage. if you look at the data, the white line shows year-over-year change in employment growth for

long-haul drivers. it is starting to accelerate. it is not obvious companies are having troubleit is not obviouse having trouble hiring these people because they are finding -- joe: the white line. matt: the blue line shows wage growth. it has not gone up at all. what we have is employment growth for truckers outpacing employment in the overall economy. wage growth is below wage growth in the overall economy. that is the exact opposite of what you would expect. joe: literally. matt: so the driver shortage, we don't have to be too concerned yet, but it will be something to keep an eye on as we talked about, these trucks that people have been ordering to be delivered in the next few months and they have to find drivers to put them in those seats. scarlet: it could be an urban legend. lisa: maybe there is something elselisa: going on. there are enough people. matt: certain people are having trouble, but we are not seeing it on a national level in the data.

scarlet: thank you so much for those charts. if anyone misses them they can go to tv and check them out. .he formula for a comeback dow chemical talks about getting the industry growing again. we hear from jim prettily. this is bloomberg. ♪

scarlet: the ceo of dow chemical waiting in on trade. we spoke with him today. >> so far it has not had a big impact on us. obviously our key raw materials are feedstocks. we are typically located where the feedstock sources are. we are not shipping feedstocks around the world to get to our facilities could we export materials, and i think a lot of the market is concerned about on that.t

we built the saudi arabia joint venture to serve europe, the middle east and asia appeared we built coast assets to service latin america and america. we are sourcing our growth in asia from the middle east. we export out of canada. we export out of other locations like thailand. i don't see a big impact. we have to watch our customers. there is going to be, as we go through this, there will be inflationary impact that happens through the value chain. our packaging customers, if they use aluminum and plastic, they see aluminum go up. they see plastic prices go up because oil is going up and gas is going up. we are in probably and inflationary time anyway -- an inflationary time anyway. we have to keep a look at the pass-through on these costs. what does it do to downstream consumer demand? >> are you concerned about

patterns on growth because of the trade situation because economists tell us if we go forward and keep increasing trade tensions, it will affect global growth, and that could affect demand for product. >> i have not seen that. 70% goes into consumer products. if you look at the strength of the consumer in china, consumer strength is good. in the u.s. it is good. i have not seen the impact. we will watch that and see if it backs up. spinoffto me about the of dow because you are going in a split direction. one of your big competitors is going in the opposite direction. what is the strategy of the spinoff and how does that put you in a better competitive advantage? >> when we brought the companies together, one of the key ideas was to take the act business and's -- ag business and spin

that out. on the materials side we will be an integrated company. we may not have the breadth, but we will still be integrated in the six is this is we are in, but we will be more focused, and that will allow us to be a better capital allocator as we move forward and we will be able to continue to invest in organic growth to keep the rate from earlier. in the old time we had 13 businesses to serve us and we had to allocate capital across 13 different businesses. kind of hard to keep up with pace of gdp growth. david: talk to us about jobs. we have to ask you. here is a chart that shows the number of employees in chemicals and plastics overtime going back to 1998. it went down, but it has come back. chemicals is the white number, plastics the blue. not near the level it was. what is your experience with employment? >> it is coming back.

with the facilities we built, we have had a lot of hiring but we have had a big change in demographics. as we move to be more digital and move there, we move into robotics and sensors and data analytics. we are carrying a different mix of people, people with mixed experience. even though the numbers are coming back more slowly than they have been in the past, the 45 has shifted 35% to percent are millennials p we hire at the rate of 2000 year because you have to replace a generation retiring. in some cases we are rebuilding an industry from the late 90's to 2011 had no investment material. you are rebuilding it to be a new company. scarlet: that is the ceo of dow chemical's. this is bloomberg. ♪ ♪ two, down and back up.

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with i am mark crumpton first word news. the united states is taking steps to make sure humanitarian aid doesn't face unnecessary obstacles in getting to north korea. the united nations says 10 million people are in need of food and other assistance. new guidelines expected to be adopted monday by the security council committee that monitors sanctions against north korea. authorities have warned of a new ebola outbreak in the democratic congo has posed a challenge with multiple groups active in the region. the city and a will traveled border with uganda and rwanda are nearby. the latest outbreak in

northeastern congo was announced after another one in the northwest was declared over. >> it is good news and bad news. the bad news is this strain of ebola carries with it the highest mortality rate of the others anywhere above 50% and higher, including the previous. it is the most deadly variant of the ebola virus strains we have. that is the bad news. the good news is we do have, although it is still being investigated, a safe and effective vaccine. mark: the vaccinations of 3300 people helping containing the previous outbreak which saw 33 deaths. nasa has assigned the astronauts to arrive in the first commercial capital next year to bring human launches back to the u.s. they have been assigned to the first flight, gather today at

the johnson space center in houston for the announcement. hasnstead of going, spacex pulled expertise from around the nation. spurring innovation and economic growth and expanding u.s. leadership in space. mark: by handing off crew and cargo runs, nasa has set its sights on the moon and mars, developing the orion capsule and the massive space launch system rocket. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: let's get a recap of market action. we saw the s&p 500 round off its fifth weekly gain. this as the overall benchmarks closed near the highs of the session. earnings one reason why,

positive earnings surprises a lot of u.s. shares, although we did see energy companies decline as oil prices slumped. pricing power, companies have the pricing power to respond to the trade war's impact on freight and commodity costs. joining us is honor. thank you for being with us. you wrote a fabulous column that i thought was insightful, consumers are about to feel the pinch. how much are companies going to feel this? connor: when you talk about inflation you think about 2% annual which is moderate and .2% or something a month. in the cluster, like after the tax cuts everybody was getting $1000 bonuses a month. -- at once. we have not seen any price increases in a while you might see this very bumpy price increase in the next quarters that could shock consumers and

lead to a crunch. joe: every company would like to raise prices to make money, but price increases don't always stick. if you raise prices, competitors don't, maybe competitors raise prices, you use that as an opportunity to undercut that. will it stick, or are these priests -- price increases aspirational? >> what we have seen most so far is restaurants. that sector has seen companies raise prices 3%. you get that rice increase but you have seen the 2% decline in traffic, so sales are up, but it is a question is that something what you want to do? you are charging fewer customers more dollars and is not sustainable. joe: i forget which company, procter & gamble, selling diapers, said they would charge more -- is that the kind of product where, if one diaper is

$.30 more, they will lose market share? connor: it is a question of how companies behave. if everyone's costs are going up person -- they areing>> if one getting hit at the same time. what should happen is everybody raises prices equivalently. >> and joe mentioned procter & gamble, a consumer staples provider. industrialve selling, the effect might be different. >> they've had a greater .ncrease in crossed -- in cost will they decide to not do , the real story for the macroeconomy is not necessarily inflation, but if everybody is raising rises at the same time, what kind of impact will that

have on budget? >> and we might see it all at once at one point down the road. have you seen or heard any analysis of anyone trying to quantify that? is it percolating or something that you are thinking of and it is still the early days? >> i think it is still early days. the companies are saying that we will do this. in theil it shows up data, it's hard to analyze because it is something they say they are going to do. in fear he, they could walk it back if they are not successful. , they could walk it back if they are not successful. >> honestly, if they don't work, people will pay more for them. talk about consumers facing a pension and being struck by this. and being struck by this. does that lead to a sudden

slowdown in the u.s. economy? guest: i think so. if your company gives you a raise every year and you get a increase on the things you buy in august, you don't get that raise until january. there is a timeshift until that raise catches up to your budget. you are forced to cut back or borrow more on your credit card. joe: talk to me about the relationship between input cost prices and the ability to sell. -- and wese companies have seen lots of them saying that commodity cost are rising, labor cost are rising. is there a link between the cost inability to have pricing power? or on the calls, they want to tell the analyst and investors that we are trying to mitigate? you don't have to worry

about quarterly disruption the way a tech company might. but consumers will buy diapers and soda five years from now. if you get a very rapid price increase, you're ok waiting it out a few months even if your investors freak out. you know that the cost will come down and you can slowly raise prices to get back to where you were. companies, the concerns are decades and we will be fine. i you mentioned tack and wonder if tech's phone herbal to the same effect. is it more resistant? good example be a because they are a consumer brand, but they are part of the infrastructure and not necessarily affected the same way procter & gamble would be. guest: they are not directly impacted by terrorists -- tarri iffs.

and the company they buy from cuts back on it spend. -- they can really come into the back door even though it is not direct with ter -- tariffs. joe: indian rupees are widely held by central banks and used in international transactions. could that change in the next couple of decades? get involved in the conversation. send me a tweet. @thestalwart. i post links, video, charts i like. check it out. this is bloomberg. ♪

joe: the indian government tries to formalize the nation's economy and widen the tax days, bringing more indians into the middle class, the rupee is growing. our next guest says the group could become a hard currency by 2030. the director of research at the jerome levy forecasting center. thank you for coming. right now, the rupee doesn't have much of an international role. what does it take? we hear all the time about the u.n.. what does it take for central banks to want to hold a currency and become an international currency? day,: at the end of the most of the currencies that are theed hard currencies, dollar, the u.k. pound, the japanese yen, the euro -- what are the characteristics of developed countries? they have financial products and

markets. there are investors that hold real estate, of course, but central banks are holding treasury bonds. stock and that security, for the fact that you need financial markets. joe: what is india doing now? , whatece that you wrote is india doing right now that is setting the stage? srinivas: the key aspects of what creates the market, you have a lot of formal financial activity. most economic activity takes place in the formal sector. under the table, cash activity is low. the transactions are cash.

the first thing the government has done is to try to formalize the economy. joe: one of the things is due monetization. guest: the sales tax. they take them at various levels and collect them in one single tax at the national level. they are forcing the product payments. so if some businesses are paying taxes and the have to get input credit, they want the supplier to be on the book. otherwise, they will not get credit. joe: in terms of what is seen in the data, in terms of the formalization of the economy, bringing the economy from crash into an electronic tax market, is that working? guest

thoseas: tax to gdp is at levels even though gdp is not growing that fast. things -- [indiscernible] andsee digital transactions more important, people are putting more money into mutual funds. it will be brought up for things like that. joe: we thinkk -- of taxes as funding the government. demand for thee currency. it is a really old view, it goes to the currency demand that is created by the need to pay taxes. the government demands that you pay taxes. base,you have a large tax

it can take a life of its own. joe: if we can avoid paying taxes, pay you in dollars, bitcoin, gold, anything. rupees.o acquire some the expansion of the fiscal state, a key role in stabilizing the government. how much can the government stabilize the economy? markets: with most economies, the key characteristics is that they are very procyclical. they have to tighten monetary policy -- and they don't have a large tax rates. so it is not a good asset even for their own citizens.

ahead, in the short term, people will look at inflation and gdp and stuff like that. but in the long term, we want to be looking at things like the expansion of fiscal assets, the ability of the federal government to provide countercyclical fiscal stimulus. these are the big questions that will determine whether the rupee is a real international currency in the decades to come. srinivas: and deeper liquid financial funds. at therector of research jerome levy forecasting center, thank you very much. , the latest, the eu industry to take a hit from tariffs. detailshave all the next. from new york, this is bloomberg. ♪

>> what did you miss? european tariffs are hitting another u.s. industry and giving manufacturers the blue jean blues. the denim industry already declined into a shell of what it once was. matt townsend is here. the eu specifically targeted the blue jean industry, made in the usa, blue jean makers. our genes even made in the u.s. anymore? for the most part, they are not. doesn't make genes here anymore. they make them in asia or mexico. headahead scratcher -- a scratcher. all of a sudden, they are pulled into this trade war. trade skirmish is

stuck in the 1980's. we are dealing with the 1980's. blue jeans. harley davidson. sense.n't make a lot of are runningreneurs andtively small companies i'm struggling to keep this business going. areof all things, they getting dinged by this shift towards protectionism. there is a 35% tariff.

joe: i imagine a lot of these rod denim rands have hard-core fashion people. sensitive? they aree retailers selling to your conscious enough that they can buy similar tight jeans. and i have to pay this tariff. spend 200 ifill they spend six dollars more, that big of a point. but apparently, it is. these companies, they basically feel like they should be protected. kind of industry that the president was trying to promote or encourage. >> outlining the genesis of american bluejeans in the 1800s,

becoming the axiom of american -- that image was very much part of the tariffs, in a way. guest: the eu has gone after very specific, american products. bourbon,ut them on chewing tobacco. one of the quotes from the small companies saying, why don't they do apple ply? -- apple pie? it won't have an impact on the economy. that theyhey assuming will be in place for the long-term? or that these will be revealed after a deal is struck soon. doing misreporting and

talking to companies of different sizes, no one knows how long it will last. >> and surviving to the short term. in this week's "there's an etf for that" we talk about one of the world's most crucial resources. the water resources etf is under the ticker foe. to purify products water for homes, businesses, and industries. geographic focus u.s. listings. the biggest listings are dan , and ther technology fund is also top-heavy. the 10 largest holdings make up

60% of the weightings. it does include small caps as well. it carries an expense ratio of 61 basis points. since launching, the fund has seen its return more than double , but still trailing the s&p 500 by a wide margin. and holding onto a positive return here today. get a green light in the traffic light system because what you see is what you get. and be sure to check out bloomberg etf iq on every wednesday at 1 p.m. new york time. you need toup, what know to gear up for next week. this is bloomberg. ♪

>> u.s. stocks closing near the highs of the session with the s&p 500 rounding out the fifth straight week of gains. don't miss this on monday, the first phase of her he imposed sanctions on iran will take affect. joe: disney announcing a third quarter on tuesday. >> don't miss the numbers that come out next friday. excited.

>> inflation, are we getting it? bloomberg technology is up next. >> have a great weekend. this is bloomberg. ♪ this isn't just any moving day.

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♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." apple's $1 trillion milestone has everyone talking. with sector reclassification on the horizon, how big is too big? the great firewall. china wants to be the world's tech leader but leading companies still want to beijing to let them then. where google and facebook